B.C. Budget sees little change for mining industry

Vancouver – The 2010 British Columbia budget held few surprises for the mining industry, mostly forging ahead with previously announced commitments.

The budget speech by Finance Minister Colin Hansen was heavy on Olympic rhetoric, saying only of the primary industries that “Mining, forestry, oil and gas… these are all essential to the health of our economy. They are poised for new growth as the world economy continues to recover, and with this budget we are taking steps to support their development.”

Hansen’s speech, and his budget, did concentrate heavily on the harmonized sales tax, which he said was “widely regarded as the single most important step government can take to strengthen our economy.”

The Mining Association of B.C. (MABC) hailed the continued push towards a harmonized sales tax, calling it in a statement by MABC president and CEO Pierre Gratton “one of the most important and innovative tax reforms the government could bring forward. The HST will improve BC’s tax competitiveness, attract new investment, improve productivity and create jobs.”

The biggest gripe from the Association for Mineral Exploration B.C. (AME BC) was the 14% funding cut at the Ministry of Energy, Mines and Petroleum Resources, which follows on a 4% cut in 2009.

“We were surprised as to how far the cuts went with respect to our ministry,” said Gavin Dirom, AME BC president and CEO. “It’s obviously important to be fiscally prudent and responsible…we would just also expect that for any sector that provides and creates such wealth that we would be supported appropriately.” Dirom had earlier noted that the metal, coal and minerals sector is expected to contribute $1.15 billion to the provincial government over the next three years.

In addition, Dirom called for the reinstatement of Geoscience BC and the B.C. geological survey, which he said were “critical to the success of our sector.”

Gratton also expressed concern about the Ministerial cuts, but praised the decision to keep funding for the Environmental Assessment Office untouched.

The budget also confirmed a promise made in January to extend the Mining Flow-Through Share Tax Credit by three years. The program gives a 20% refundable tax credit to qualifying grassroots exploration expenditures.

Dirom was pleased with the extension, but would like the credit made permanent. The Flow-Through program cost the province $7 million in 2009 fiscal year and is in addition to the Mining Exploration Tax Credit, which cost $4 million.

Blair Lekstrom, the Minister of Energy, Mines and Petroleum Resources, in his written budget address, highlighted the commitments to bring power lines to highway 37, writing “The Northwest Transmission Line will support the development of a number of new mines and take advantage of the vast mineral potential of the province’s northwest region.”

The province, through BC Hydro and the BC Transmission Corporation, has committed $10 million to support the project’s environmental assessment and First Nations consultations, while the federal government has committed $130 million through the Green Infrastructure Fund. The 287-kv line is planned to extend 335 km from Terrace to Meziadin Junction and north to Bob Quinn Lake.

Both the AME BC and the MABC had high praise for the federal throne speech a day later, which called for a simpler and more efficient environmental review process. The B.C. provincial throne speech in February also called for an improved review process.

Overall there was little new or risky in the budget, cautious being the word of the day.

“It was a safe and prudent budget, it wasn’t making waves in any way,” said Dirom.